August 12, 2008
"COMMENTS ATTACHED"
PECKINPAUGH BEASLEY, Inc.
Business, Estate, and Retirement Planning Specialists
Jack Peckinpaugh, CLU, ChFC, RFC, CEPS
Chairman Christopher Cox
Securities and Exchange Commission
409 East 30th Street
Sioux Falls SD 57105
Subject: SEC Proposed Rule 151A
Dear Chairman Cox,
I have been in the financial service business for 54 years and I know that from time to time we
have had bad apples in our business, which makes it difficult for everybody. I want to
applaud you for your efforts to protect the consumers. I believe your main concern is about the sales and marketing practices some agents have in selling the index annuities.
The fact still remains that the index annuity is very popular with the more mature saver who
doesnt want to risk losing any money. That is the very important feature of the
index annuity, which makes it different than a security. You do not loose principle when the market turns down, which has been a very positive feature with my clients this past year. Index annuities are a solution for many risk adverse clients, so making these products a security could potentially eliminate hundreds of thousands of policyholders for whom the index annuity is a perfect solution.
The insurance industry and the state regulators have already established the suitability and compliance requirements for index annuities. Im sure the industry, the state insurance commissioners will keep you well informed of all the suitability, and compliance requirements they have put in force the past few years to protect the consumer.
This change in law would have adverse financial impact on many people in our industry, including many people who are currently are employed in the home offices. The last thing we need right now is a ruling that could potentially cost hundreds of jobs.
I think you will find the suitability requirements for fixed annuities are equal to, and at times more stringent those in the mutual fund and variable annuity arena. Indexed annuities are a guaranteed
product. Clients have not lost a dime due to market losses. They are a very valuable product
and the SEC Proposed Rule 151A could keep thousands of risk adverse clients from hearing about the advantages of this product.
As I previously stated, many jobs are at risk if this Proposed Ruling becomes law.
Chairman Cox, I do not think the period for comments is long enough. I believe it should be
extended to at least December to give time for more individuals comments to the SEC.
Annuities have been around since 1846 and this is a very major and important change that is
being proposed, so it is imperative that there be adequate time for outside comments.
Sincerely,
Jack Peckinpaugh, CLU, ChFC, RFC
314 W. Jackson Street, P.O. Box 632 Muncie, IN 47308 Bus:765-287-8310 Fax:765-287-8518